- Gold reaches a new all-time high of $2,942, soaring over 11% in 2025.
- Markets were caught off guard on Monday as China retaliated against US President Donald Trump’s tariffs.
- The $3,000 mark is approaching rapidly, though tail risks are increasing.
Gold (XAU/USD) set another all-time high at $2,942 in early Tuesday trading before retracing most of its gains. Meanwhile, U.S. President Donald Trump has implemented 25% tariffs on steel and aluminum imports for all countries starting March 12, while China has quietly responded with retaliatory tariffs on select U.S. goods. So far, China has taken a measured approach, while Trump has yet to follow through on his campaign promise of imposing 60% tariffs on all Chinese imports, according to Bloomberg.
Investors are now turning their attention to Federal Reserve (Fed) Chair Jerome Powell’s semiannual testimony before lawmakers on Tuesday and Wednesday. Powell is expected to emphasize the resilience of the U.S. economy, reinforcing the Fed’s cautious stance on rate cuts. This poses a downside risk for gold, as a hawkish tone could weigh on bullion prices.
Daily Market Movers: Gold’s Safe-Haven Appeal Amid Tariff Tensions
- 15:00 GMT: Fed Chair Jerome Powell testifies before the U.S. Senate Banking Committee.
- U.S. Tariffs: President Trump reaffirmed on Monday that the latest round of tariffs, set to take effect in March, aims to boost domestic production and job creation. He also hinted at the possibility of raising tariffs further, Bloomberg reports.
- Rate Expectations: The CME FedWatch tool indicates a 93.5% probability that the Fed will keep interest rates unchanged in March, with only a 6.5% chance of a 25 basis point (bps) rate cut.
Technical Analysis: Key Resistance and Support Levels
Gold has gained 11% year-to-date, solidifying its position as a preferred trade in Q1. However, Fed Chair Powell’s testimony later today could trigger profit-taking if he signals a more hawkish stance, pushing yields higher and pressuring gold prices.
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Support Levels:
- Pivot Level: $2,891
- S1 Support: $2,871
- S2 Support: $2,835
- Key Support: $2,790 (October 31, 2024, high)
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Resistance Levels:
- R1 Resistance: $2,928 (already tested earlier today)
- R2 Resistance: $2,950 (major resistance zone)
- Psychological Resistance: $3,000
A successful move above $2,950 could set the stage for a push toward the $3,000 mark, while a break below key support at $2,790 could signal deeper losses. Traders will closely watch Powell’s testimony for further market direction.
